NBAD Middle East & African Monitor – 07 April 2017
US hits Syrian airbase – Russia calls missile strikes “illegal”
The US military launched 59 Tomahawk cruise missiles at the Al Shayrat airbase in Syria last night, in what the White House said was retribution for the reported sarin gas attack by the Syrian Airforce on Idlib earlier in the week. Last night’s strike was the first direct US assault against Syrian government forces since the civil war began almost 7 years ago, it is also a reversal of President Trump’s earlier strongly stated focus of prioritising the destruction of ISIS, rather than working to weaken Bashar al Assad’s grip on power. In a speech following the US action, Trump said that he had been forced to act because "Assad choked out the lives of helpless men, women and children," and because it was in America’s national security interests to “prevent and deter the spread and use of deadly chemical weapons." The last part of his statement is interesting because it appears to be worded in such a way that acts not only as a warning to Assad, but also to Iran and North Korea. The Tomahawks were launched from the destroyers USS Porter and USS Ross, both of which are currently sailing in the Eastern Mediterranean. Meanwhile Russia’s Vladimir Putin denounced the US strikes as “illegal,” while his country’s parliamentary defence committee has called for an urgent meeting of the UN Security Council, adding that such actions “could undermine efforts to fight terrorism in Syria.” Tehran has also condemned the US, while a source from Saudi Arabia’s Foreign Ministry reportedly expressed; “The Kingdom of Saudi Arabia's full support for the American military operations on military targets in Syria, which came as a response to the Syrian regime's use of chemical weapons against innocent civilians." Market wise the news overnight sent crude prices almost 2% higher.
Powerful conservative to stand in Iran’s presidential elections
Hardliners within the Iranian regime have nominated five potential candidates to stand in next month’s Presidential election, including an influential cleric, Ibrahim Raeisi. Conservatives have also reportedly agreed to rally around whichever candidate emerges as the frontrunner, in an effort to preventing the incumbent, Hassan Rouhani, from winning a second term. Most of the focus is likely to fall on Raeisi who is a former Prosecutor-General, and a member of the ‘Assembly of Experts.’ More importantly he was recently made custodian of ‘Astan Quds Razavi,’ one of the country’s wealthiest charitable foundations, a position which has a substantial religious significance, and this latter point indicates that his entrance into the Presidential race would likely have had the full support of Iran’s Supreme Leader, Ayatollah Ali Khamenei.
FITCH issues latest break-even oil price estimates
FITCH ratings agency has released its latest estimates of the current break-even prices for the major oil producing countries around the world. The list reads as follows : Nigeria – US$139, Bahrain – US$84, Angola – US$82, Oman – US$75, Saudi Arabia – US$74, Russia – US$72, Gabon – US$66, Iraq – US$61, UAE – US$60, Qatar – US$51 and Kuwait US$45. The agency also expects crude prices to average US$52.50 this year.
Nigeria’s CB provides fresh liquidity to exchange houses
The Nigerian Central Bank said it had supplied a “special” additional injection of US$10,000 to each of the country’s 2,990 exchange houses, due to an unexpected increase in demand for US dollars by qualifying individuals and small retailers. According to Reuters USD/NGN closed around 398.00 in the ‘kerb’ market yesterday against an official rate of 305.00.
Egypt’s president meets with IMF chief – inflation remains a concern
President Sisi and the IMF’s Christine Lagarde met earlier this week to discuss the progress of his country’s economic reform program. In a statement published on the IMF’s website Lagarde was quoted as saying; “President Sisi and I discussed the progress of Egypt’s economic reform program supported by the IMF’s US$12 billion Extended Fund Facility arrangement. Egypt is implementing a strong economic reform program to help the economy return to its full potential, achieve more growth and create more jobs. We recognise the sacrifices made and the difficulties faced by many Egyptian citizens, especially due to high inflation. The IMF is working to help the government and the Central Bank bring inflation under control and supports the steps the Egyptian authorities are taking to protect its poorest and most vulnerable citizens.” Urban consumer inflation in Egypt touched 30.20% last month its highest level in almost 30 years, although inflationary pressures are expected to ease somewhat towards the latter half of this year.
Aramco raises SAR11.25 Bio via debut SUKUK
Saudi Aramco reportedly raised SAR11.25 bio via its debut Islamic bond issuance earlier this week. The floating rate 7-year bond pays 0.25% over the 6-months SAIBOR rate.
US State Dept approves military services package for Kuwait
The US State department yesterday approved the proposed provision of facilities and construction support services for Kuwait’s Al Mubarak airbase. A contract which if finalised is reportedly worth US$319 mio.
Marsa Maroc eyes shipping terminal in Ghana
Morocco’s Marsa Maroc is amongst four bidders seeking to buy the Takoradi shipping terminal in Ghana.
Did you know that the world’s first ever law school was founded in the city of Beirut in Lebanon?
Glenn Wepener, Executive Director & Geopolitical Analyst Middle East & Africa
National Bank of Abu Dhabi
Tel: +971 2 6110 127
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